Case for the unstructured audit approach;

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The Case for the Unstructured Audit Approach
Jerry D. Sullivan
Coopers & Lybrand
In their recently completed study of the audit methodologies of 12 large accounting firms—the Big Eight plus four of the next six largest firms—Cushing and Loebbecke analyzed the firms in terms of the amount of structure in their audit approaches and then classified the firms as "highly structured," "semi-structured," "partially structured," or "unstructured."1 Based on the characteristics of a structured approach, as that term is defined in the study and discussed below, I hope that Coopers & Lybrand falls into the "partially structured" category, which could also be called the "mostly unstructured" category. It's interesting to note that when C&L revised its audit approach in 1969, to what was the forerunner of our present approach, we called it the Uniform Audit Approach, thinking at the time that it was one of the most structured approaches in the profession. Today, those same initials—UAA— might be used to identify the "Unstructured Audit Approach."
Cushing and Loebbecke define a structured audit methodology as "a systematic approach to auditing characterized by a prescribed, logical sequence of procedures, decisions, and documentation steps, and by a comprehensive and integrated set of audit policies and tools designed to assist the auditor in conducting the audit." Using that definition, it's hard to be against a structured audit approach; to favor an unstructured approach seems almost subversive. I would like to suggest, however, that merely calling the two polar positions by other names would go a long way toward removing what some symposium participants probably view as the stigma of an unstructured approach. For example, in addressing what are essentially the same issues, Dirsmith and McAllister2 use the terms "mechanistic" and "organic" instead of "struc­tured"
and "unstructured." I would much rather be associated with an approach that is viewed as organic than one that is referred to as unstructured. On the other hand, I am sure that many auditors who take pride in their firms' structured approaches would resent those approaches being referred to as mechanistic.
There is a range of audit approaches between the two polar positions of "structured" and "unstructured." I have already indicated that we thought our approach was fairly structured when we first developed it. When I read the Cushing-Loebbecke definition of a structured audit approach, I again thought that our approach fit that definition. We always have believed that our approach is systematic, comprehensive, and integrated—as those terms are typically used. It's only when I see how far some firms have carried the notions of
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